On Monday, BMO Capital Markets adjusted its price target for Ameren Corp . (NYSE:AEE), increasing it to $81 from the previous $79 while maintaining an Outperform rating on the shares. The revision followed the utility company's first-quarter earnings report, which revealed earnings per share (EPS) of $0.98. This figure fell short of both BMO Capital's estimate of $1.12 and the consensus estimate of $1.07. Despite this, Ameren's year-over-year results only saw a slight decrease of $0.02.
The company stood by its full-year 2024 guidance, projecting an EPS range of $4.52 to $4.72, with a midpoint of $4.62. This reaffirmed guidance aligns with the consensus estimate and BMO Capital's own forecast. Ameren's management also reconfirmed its five-year capital plan, which totals $21.9 billion. This plan is expected to drive a compound annual growth rate (CAGR) of approximately 8.2% in the rate base from 2023 to 2028, subsequently supporting an EPS growth of 6-8%.
The analyst from BMO Capital cited the mark-to-market (MTM) of peer group multiples utilized in their sum-of-the-parts (SOTP) framework as the rationale for the uptick in the target price. This approach reflects the firm's confidence in Ameren's stable financial outlook and growth trajectory. Despite the lower-than-anticipated earnings for the first quarter, the company's reaffirmed guidance and capital investment plan appear to underpin BMO Capital's positive rating.
InvestingPro Insights
As Ameren Corp. (NYSE:AEE) navigates the post-earnings landscape, real-time data from InvestingPro provides a snapshot of its financial health and market performance. With a market capitalization of $19.75 billion and a P/E ratio standing at 17.01, Ameren demonstrates significant market presence and valuation metrics that investors should consider. The company's revenue for the last twelve months as of Q1 2024 amounted to $7019M, although it experienced a revenue decline of approximately 10.62% during the same period. This contraction in revenue is reflected in the company's earnings miss reported in the first quarter.
InvestingPro Tips highlight Ameren's commendable history of raising its dividend for 10 consecutive years and maintaining dividend payments for 27 consecutive years, which may reassure investors looking for stable income. However, the company operates with a significant debt burden and short-term obligations exceeding liquid assets, presenting potential liquidity concerns. Moreover, two analysts have revised their earnings downwards for the upcoming period, suggesting that investors should keep an eye on future earnings projections. Despite these challenges, Ameren's stock is known for low price volatility, which could appeal to risk-averse investors.
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